A Guide to Watching for Fraud During the Mortgage Process

Authored by Russ Weiss, CFP® & Ben Stucker, Co-Founder and CEO of Mortgage CS

Large sums of money are transferred between parties during the mortgage process.  It’s no surprise that criminals take this as an opportunity to prey on consumers.  One mistake by a consumer could result in thousands, tens of thousands, even hundreds of thousands of dollars falling into the wrong hands.

It can be critical to watch out for mortgage fraud red flags and to know that fraud can take many forms during the mortgage process. Fraudsters look to steal valuable identity information and also aim to swindle your hard-earned money.  Let’s examine what to do and not to do and the typical scenarios where you may be most at risk.

Your hard-earned money (and a lot of it) can be at risk

Mortgages typically involve large sums of money. This attracts much-unwanted attention from fraudsters and hackers looking for a large payday. Impersonation from these fraudsters is perfected so you may not suspect anything until it’s too late. Typically, these fraudsters will wait until the end of your mortgage process to go in for the big payday.

So what does this scam look like and how can you protect yourself?

The Scam

Picture this: You receive an email from a title company contact a few days prior to closing requesting a wire for the funds due at closing.  Nothing looks suspicious as the names, colors, logos, and the email address look about the same as other emails you have previously received from this person.  

The message may say to call a provided number to confirm the wiring information, so you do and a friendly voice confirms the information.  You then wire the money…. but you will never see it again.  

How did this happen!?

How it works

Turns out the e-mail you received wasn’t really from the title company!  It was an imposter email. You may only realize after the fact that there was a very slight difference, but one that you rationalized as acceptable or didn’t notice.  For example you had been communicating with TomTitle@faketitle.com and the scam email address may be something like TomTitle@faketitlegroup.com. Would you think anything of it?  Likely not.

The email contained wire instructions for a shell account overseas and the friendly voice you heard was NOT a title representative, but a member of the fraudsters group happily encouraging you to send your money to them. 

As soon as the wire hits the shell account, it is transferred out and the account is closed.  All information associated with the scammers vanishes instantly and your money is long gone. 

How to help protect yourself from mortgage fraud

It is essential, no matter how busy you are, that you confirm wire instructions properly. This does not involve calling the number in the same email as the wire instructions or on the wire instructions document. Here is what to do…

Step 1: Be vigilant and don’t rush into sending money.

Step 2: Contact the title company through a phone number on their website or google search would have likely been safe.

You can also email or call your real estate agent and/or mortgage broker and ask them to obtain the wire instructions to do a preliminary comparison.  This should not take the place of a phone verification step, however. 

Step 3: Look at the email address and notice any differences. The slightest difference should not be overlooked, ever. Fraudsters can also “hack” an email account so the email address may actually be correct.  Taking the action in step 1 can protect you from this approach, too. 

Be wary of mortgage solicitations you receive in the mail or via email

After closing on your mortgage, you may receive advertisements in your physical mailbox that can be deceptively misleading.  

The same credit agencies that sell your personal contact information leading to those pesky phone calls apply to postal mail, too.  Deceptive mortgage companies may send you mail that includes personal information (such as your name and current mortgage company – all public information) to trick you into taking action with them.  If you read between the lines, often buried in small print disclaimers, you’ll see that they are not affiliated with you or your mortgage company in any capacity.

These offers can be for life insurance or other financial products. The offers often include logos that appear to be a government office and/or subsidiary.  Truth is, they are scams and/or misleading advertising where the companies are attempting to scare you into taking action. So be very skeptical and read the fine print at the bottom of the letter or the back of the letter (where they are trying to hide it). 

In the majority of cases, you’ll be able to toss the solicitation in the garbage or delete the email. When in doubt, take a photo of the mailing and securely send it to your trusted mortgage professional or financial advisor.  They will be able to quickly verify the legitimacy and provide guidance.

Lastly, always be cautious of email solicitations and never click on links unless you verify the email is from a trusted resource. Adocument that looks like an attachment can lead to major trouble if opened. 

This article was written with contribution from Ben Stucker, Co-Founder and CEO of MortgageCS.

MortgageCS (“Mortgage Concierge Service”) is an independent mortgage broker providing competitive rates, fast close times, and service from start to finish.  

At MortgageCS, we pride ourselves on our ability to match clients with the perfect mortgage plan, by having multiple lenders compete for each and every loan.

MortgageCS is licensed or registered in CA, CO, DC, DE, FL, MD, NJ, PA, SC, VA, and WA. Company NMLS #1464766.  Learn more at MortgageCS.com.

MortgageCS and The Marshall Financial Group, Inc. are NOT affiliated.


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